On Our Radar

On Our Radar

September Retail Sales Boosted by Autos

People look at vehicles for sale on the lot at AutoNation Toyota dealership in Cerritos, California December 9, 2015.
(Reuters)

U.S. retail sales rebounded in September amid a surge in motor vehicle purchases and a rise in discretionary spending, pointing to sustained domestic demand that reinforces expectations of an interest rate increase from the Federal Reserve in December.

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The Commerce Department said on Friday retail sales increased 0.6 percent after an upwardly revised 0.2 percent decline in August. Retail sales in August were previously reported to have decreased 0.3 percent.

Sales were up 2.7 percent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales edged up 0.1 percent last month after an unrevised 0.1 percent drop in August.

The retail sales report added to upbeat data on the labor market and manufacturing and services sector surveys that have suggested economic growth regained speed in the third quarter after a lackluster first half.

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Minutes of the Fed's Sept. 20-21 policy meeting published on Wednesday showed several officials believed it would be appropriate to increase interest rates "relatively soon" if the economy continued to gain strength.

The U.S. central bank raised its benchmark overnight interest rate last December and has held it steady since, largely because of concerns over low inflation.

The Atlanta Fed is currently forecasting the economy growing at a 2.1 percent annualized rate in the third quarter after a 1.4 percent expansion pace in the second quarter.

Auto sales rose 1.1 percent last month after slipping 0.3 percent in August. Retail sales were also boosted by receipts at service stations, which jumped 2.4 percent as gasoline prices increased.